BLBG:Gold Snaps Three-Day Decline as Rising Demand Drives ETP Assets to Record
Gold gained, snapping a three-day decline, as the metal’s drop to a six-week low attracted investors amid record exchange-traded product holdings. Platinum and palladium advanced.
Spot gold rose as much as 0.3 percent to $1,678.82 an ounce, and traded at $1,677.73 at 11:44 a.m. in Singapore. The metal fell to $1,663.30 yesterday, the lowest since Jan. 25. Bullion assets in exchange-traded products gained to 2,406.313 metric tons yesterday, according to data compiled by Bloomberg.
“There are still many people who are willing to buy gold to protect their wealth,” said Lv Xiaowei, an analyst at First Futures Co., ranked third-best China gold analyst in a Futures Daily and Securities Times poll. “A drop like yesterday’s presents a good opportunity.”
Gold lost 2.6 percent in the past three days as the dollar advanced 1.3 percent against a six-currency basket including the euro. Australia’s economy expanded at half the pace economists forecast in the fourth quarter, data showed today, adding to signs Europe’s debt crisis may be hurting global growth.
The euro rose against the dollar today on speculation that it had approached a level that makes the value of some option contracts worthless. Demand for the 17-nation currency was limited as a deadline nears for Greece to reach a deal with creditors over a bond swap to secure a second aid package.
Bullion has so-called technical support at $1,656 an ounce, according to Scotiabank. That’s the 50 percent Fibonacci retracement of the rally from $1,522.65 on Dec. 29 to a 15-week high of $1,790.75 on Feb. 29.
“Risk remains for a deeper correction,” with a 61.8 percent retracement to $1,625, Scotia’s strategist Russell Browne, wrote in a note. Buy orders tend to be clustered close to chart support levels.
Silver, this year’s best-performing metal, was little changed at $32.9125 an ounce, after sliding to $32.48 an ounce yesterday, the lowest price since Jan. 25.
Spot platinum gained 0.6 percent to $1,624.75 an ounce, snapping three days of declines. Palladium climbed 1.4 percent to $677 an ounce, gaining for the first day in four.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
